Last March with the SP500 over 1,400 Charles Nenner came on Breakout and told viewers not to chase stocks, lest they be exposed to a correction of 10 – 15% over the next few months. Three months later stocks are coming off a correction of almost exactly 10%, sparing those who listened to Nenner quite a bit of pain.
With stocks bonds and gold careening between hope and greed every few days Nenner updated his views and price targets for each of the Big Three.
Having been true to his word and taken money off the table in stocks 3 months ago, Nenner is looking to start getting long again this week. Focused on cycles and momentum Nenner sees a cyclical low coming in the next few days. He’s a buyer anywhere from 1,280 to 1,230 on the SP 500 but cautions those who are looking for a chance to buy and hold profitably.
“People looking for major moves are going to be disappointed,” he says. Timing and trading are key as he thinks stocks are going to be locked into a 5-10% range for an extended period.
“First people lost their shirts on the stock market then the gold market.” says Nenner. “I’m afraid that now they’re going to lose a lot of money on their bond positions.”
Of course people have been taking the other side of the bond bet for the better part of three decades, only to see yields drop to previously unthinkable lows. You have to squint to see the change but Nenner says yields have already bottomed. Bonds may fluctuate on their way but the trader is taking, building and holding as a “core position” the ProShares UltraShort Lehman 20+ year Treasury ETF (TBT).
Those unfortunate souls who lost their shirts on gold buying it at $1,900 may ultimately get bailed out by the markets but not before getting hung out to dry for a little while longer. In the near term Nenner says the cycle is going lower until the end of August or early September.
Nenner’s downside target for gold is $1375 to $1325 but he’s a buyer in size there; his long-term target remains $2,500.
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